HKA 233/1
17 MAY 1993
SECRET
141.
055171
MDHOAN 2811
SECRET
X
TO IMMEDIATE HONG KONG
FM FCO
TELNO 456
OF 131327Z MAY 93
INFO IMMEDIATE PEKING, UKREP JLG HONG KONG
TOP COPY Q DIST ?
PERSONAL FOR GOVERNOR FROM RICKETTS, HKD
HMOCS
1.
As you know, No 10 asked the Cabinet Office, following your meeting with the Prime Minister on 16 April, to come up with a recommended solution. The Cabinet Office, having seen officials from both FCO and the Treasury, have drafted a paper and have invited the Foreign Secretary's comments and those of the Chief Secretary. A copy is being faxed to you.
2. We think that the paper sets out the facts and the points on which decisions are required in a balanced way. But it amounts to a cop-out. It does not recommend a solution (which is what No 10 commissioned) and Lobs the ball back to the Foreign Secretary and Chief Secretary.
see
3. We believe that we should try to keep the Prime Minister engaged in this exercise, since this is the only way we it being resolved. We are therefore recommending that our Private Office encourage No 10 to call a meeting chaired by the Prime Minister on the basis of the paper. If that takes place we will need to provide the Secretary of State with a negotiating brief. It is improbable that the Prime Minister would rule 100 per cent in our favour and against the Treasury on an issue like this with PSBR implications. We therefore believe that the Foreign Secretary will need to know on what elements of our proposal he could give ground if forced to do so, and those on which he should stand his ground as firmly as possible. We have examined the various elements of the package and would grateful for your views on the following possible package.
Compensation Scheme
The difference between our and the Treasury's proposal is about 15 million pounds spread over 6 years. Although this is a
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